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Maunder v. Dehavilland Aircraft

OPINION FILED JUNE 29, 1984.

CRISPIN MAUNDER, APPELLEE,

v.

DEHAVILLAND AIRCRAFT OF CANADA, LTD., APPELLANT. — SAMUEL J. BETAR, ADM'R, APPELLEE,

v.

DEHAVILLAND AIRCRAFT OF CANADA, LTD., APPELLANT.



Appeal from the Appellate Court for the First District; heard in that court on appeal from the Circuit Court of Cook County, the Hon. Arthur A. Sullivan, Jr., Judge, presiding.

JUSTICE CLARK DELIVERED THE OPINION OF THE COURT:

This appeal requires us to determine whether the circuit court of Cook County has jurisdiction over DeHavilland Aircraft of Canada, Ltd., a foreign corporation. More specifically, we are asked to determine whether the defendant was doing business in Illinois in order to be amenable to service of process and subject to the laws of this State.

These consolidated actions to recover for personal injury and wrongful death are based on the crash of an airplane designed and manufactured by defendant, DeHavilland Aircraft of Canada, Ltd. (Ltd.). The airplane crash occurred on May 3, 1976, in Lusaka, Zambia, during a demonstration flight for the Zambian Air Force and caused the death of Raghubir Dutt Law, a citizen of India and a member of the Zambian Air Force. Mr. Law's widow and children are also Indian citizens. Plaintiff Crispin Maunder, an English citizen and a passenger in the aircraft, was injured in the same crash. In April 1977, Samuel J. Betar, public administrator of Cook County, was appointed administrator of the estate of decedent Law by the probate division of the circuit court of Cook County. On April 28, 1977, Betar filed suit in the circuit court of Cook County against Ltd. and DeHavilland Canada, Inc. (Inc.), a Delaware corporation with its principal office and principal place of business in Rosemont, Illinois. Inc. is a wholly owned subsidiary of Ltd. and sells and distributes parts for airplanes manufactured by Ltd.

On March 17, 1977, Crispin Maunder filed suit in the circuit court of Cook County against Inc. and Ltd. Service in the Law and Maunder suits was effectuated by leaving copies of the complaint and summons with an employee of Inc. in the Rosemont office.

On May 27, 1977, the defendants filed petitions to remove both causes to the United States District Court for the Northern District of Illinois. Inc. was voluntarily dismissed from both causes, leaving Ltd. as the sole defendant. A protracted procedural battle ensued in Federal court. Both causes were eventually remanded to the circuit court of Cook County because there was no diversity of citizenship between aliens Maunder (England), Law (India) and Ltd. (Canada). Betar v. DeHavilland Aircraft of Canada, Ltd. (7th Cir. 1979), 603 F.2d 30, cert. denied (1980), 444 U.S. 1098, 62 L.Ed.2d 785, 100 S.Ct. 1064.

On May 20, 1981, the circuit court granted Ltd.'s motion to dismiss, noting:

"Analyzing the nature and quality of the contacts with the State of Illinois, this court cannot say that it would be fair and reasonable to require DeHavilland Aircraft Ltd., a Canadian Corp., to defend this action in Illinois."

The appellate court reversed the circuit court's order and remanded the cause to the circuit court, ruling that Ltd.'s Illinois subsidiary, Inc., provided sufficient contacts to invoke the jurisdiction of Illinois courts>. (112 Ill. App.3d 879.) We granted defendant's petition for leave to appeal. (87 Ill.2d R. 315(a).) We now affirm the decision of the appellate court.

Ltd.'s corporate offices and principal place of business are in Downsview, Ontario. Ltd. has manufactured "Twin Otter" propeller-driven planes for many years, and these planes are used all over the world for short passenger flights. The record reveals that there were 885 DeHavilland Ltd. aircraft operating in the United States in 1982. In 1971, Ltd. established a subsidiary corporation, DeHavilland Canada, Inc., to facilitate Ltd.'s business operations in the United States. Inc. is a wholly owned subsidiary of Ltd., and all of Inc.'s stock is owned by Ltd. The salaries of Inc.'s directors are paid by Ltd., and Ltd. guaranteed Inc.'s lease in Rosemont. The record reveals that an average of eight telephone calls per day were made from Inc.'s office to the parent's office in Ontario. The subsidiary's sole business is the sale of aircraft parts for DeHavilland aircraft. The manual of Inc. provides the following descriptions of the relationship between Ltd. and Inc.:

"DeHavilland Aircraft of Canada has incorporated a subsidiary company in the United States of America. The registered name and address of the Company is:

DEHAVILLAND CANADA INC. 5321 North Pearl Street Rosemont Illinois 60018

The Company is controlled by the Parent Company and will operate under the authority of the Vice President [of] Sales. The function of this Company is to provide Product Support to the American users of the Parent Company's products."

Ltd. has included Inc. in advertisements published in American aviation journals. One full-page advertisement ...


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